How a Bank Statement Loan Counts Deposits for a 50% Owner

The Quick Read: A 50% owner gets credit for half of the business’s eligible deposits, and the lender then applies an expense factor to that half. Those are two separate reductions, and the order does not change the result because both are simple multiplications. Eligible deposits exclude transfers, loan proceeds, and refunds. The result is monthly qualifying income, which the lender compares to your debts.

• Ownership share and the expense factor are two different haircuts.
• Business statements get an expense factor. Personal statements often do not, but only deposits that reached your own account count.
• Transfers, loan proceeds, refunds, and unexplained one-time deposits are screened out first.
• Across the wholesale network, most programs want 12 months of statements and documented proof of your ownership percentage.
• Qualification is on documented income under the applicable program, subject to lender guidelines.

You own half of a business. The business account shows big monthly deposits. So why does the lender credit you with so much less? Because the account belongs to the company, and you own only part of the company. This guide walks through the count step by step, then shows where it bends.

Key Terms Defined

Eligible deposit: A deposit the lender accepts as real business revenue, after removing transfers, loan proceeds, refunds, and unusual one-time items.

Expense factor: The percentage of business deposits the lender assumes goes to running costs, so only the remainder counts as income.

Ownership share: The percentage of the business you can document owning, such as 50%.

Qualifying income: The monthly income figure the lender uses to judge whether you can carry the loan.

Non-QM: A mortgage that falls outside standard agency documentation rules, so lenders set their own income-verification methods.

Why Bank Statement Loans Exist for Owners

Owners often show low taxable income because they deduct business expenses. A conventional lender reads that tax return and sees a small number. A bank statement loan starts from cash flow instead, using 12 months of statements and averaging the deposits.

These loans are non-QM, which gives lenders more flexibility in how they qualify you. The lender still has to confirm you can repay. Scotsman Guide describes the self-employed case this way: the lender applies a standard expense factor (50% is its example) or relies on a profit-and-loss statement prepared by a third-party tax professional.

No federal rule sets the deposit-counting formula. The 50% owner treatment is a program guideline, and across the lenders we place files with, the details differ.

How the Count Works, Step by Step

The count runs in order from gross deposits to monthly income. Each step shrinks the number, and the ownership step is the one most 50% owners do not expect.

1. Pick the account type. The lender works from business statements or personal statements, usually 12 months. Business statements show gross revenue, so an expense factor applies. Personal statements show what actually reached you, and many programs skip the factor on them.

2. Strip ineligible deposits. Transfers between your own accounts, loan proceeds, refunds, and one-time items without a clear source come out or need an explanation.

3. Average the eligible deposits. Add up what remains and divide by the number of months.

4. Apply your ownership share. At 50%, you are credited with half of that average.

5. Apply the expense factor. On business accounts, the lender reduces your share by the factor. Fifty percent is the commonly cited default. Lower factors typically need third-party support, such as a CPA letter, a tax preparer’s letter, or a profit-and-loss statement.

The result is your monthly qualifying income.

Does the order matter?

No. Ownership share and expense factor are both multiplications, so you get the same answer either way. Some lenders write the formula as eligible deposits times ownership times expense factor, divided by the months. Others prorate first. Same result.

Which Deposits Do Not Count

Screening happens before averaging, and it is where many files lose income. The table shows how common deposit types are treated and what can change the outcome.

Some programs also flag a single deposit that is large relative to the monthly qualifying figure. A clean explanation with a paper trail helps. A vague one does not.

Personal or Business Statements for a 50% Owner

Business statements usually produce a count that is easy to document, but they carry both haircuts. Personal statements can sidestep proration because only deposits that reached your account count. The tradeoff is mixing: wages, distributions, and transfers all land there, and the lender must sort them out.

A lender may ask for two months of business statements to confirm that personal and business money are kept separate. Many investors miss this step until the file is already in review. Which path fits depends on your file, and a broker who sees many lenders’ guidelines can compare both.

A 50% Owner, Walked Through

Take a modeled scenario, with no dollar figures, to show the ladder. You own half of a consulting firm. The file has 12 months of business statements.

First, remove a loan deposit and several transfers between accounts. Average the rest by month. Credit half of that average, since you own 50%. Apply the expense factor to your share. What is left is monthly qualifying income.

Now compare a 100% owner with the same deposits. That owner skips the ownership step, so the income runs about double before the expense factor. Same account, same activity, very different qualifying income. The expense factor and ownership share compound, which is why deposits that look large on a statement can support only a fraction of that amount in qualifying income.

The expense factor is the lender’s call. It depends on business type and the supporting paperwork. A lean solo service business may draw a lower factor, while a labor-heavy business may draw a higher one. Without a CPA letter or profit-and-loss statement to back a lower figure, files typically revert to the default. You cannot simply choose your own number.

Proving the 50%

The lender will not credit ownership you cannot document. Typical proof includes:

• Operating agreement or stock ledger: shows the ownership split.
• K-1: corroborates ownership. It is evidence of your share, not the income source.
• Signed business narrative: explains what the company does and your role.
• Co-owner acknowledgment: a partner may be asked to confirm your access to the account.

Minimum ownership varies by program. Some programs require a larger stake to use business statements and a smaller one for personal statements. Treat any single threshold as program-specific and confirm it for your file.

Where the Rule Bends

Real files are messier than the five-step ladder. These are the common edge cases.

Partner deposits. If your partner moves personal money into the shared account, those deposits are not company revenue. Expect them to be removed.

Shared or multi-owner accounts. The lender can only credit you for your proportion. A co-owner letter may be requested.

Draws and distributions. Owner pay is not customer revenue. Deposits need to show where the money came from.

Ownership changes mid-window. If your share changed during the 12 months, the lender will want documents that show when. Unequal profit splits versus ownership percentages raise similar questions.

Business under 24 months. Underwriters may weigh liquid assets and credit quality more heavily.

Overdrafts and NSFs. A pattern of returned items can drag a file down regardless of average deposits.

From Income to the Loan Decision

Qualifying income is only one input. The lender compares it to your monthly obligations, and reserves matter too. Across the wholesale network, primary-residence purchase and rate-term loans reach up to 90% LTV on stronger files, and owner-occupied cash-out tops out at 80% LTV with a fixed expense ratio (75% with an accountant-prepared ratio). Investment-property cash-out tops out around 75% LTV. Loan sizes generally run from $125,000 to $3,500,000, with reserves commonly around six months of the housing payment. All of this is subject to lender guidelines, and every file is underwritten individually.

One more point. If you are buying a rental, a bank statement loan may not be the right tool. Investment purchase leverage on bank statement documentation varies by lender. A DSCR loan is reviewed on the property’s rent against its own debt service instead of your income. Scotsman Guide describes the concept: rental cash flow must equal or exceed the mortgage, taxes, and insurance. Lendmire’s complete DSCR loans guide covers that path. For a partner-owned business, ask early which route fits.

Occupancy decides the paperwork. An owner-occupied file is a consumer mortgage. A bank statement loan on a non-owner-occupied rental is business-purpose and exempt from TRID. Credit extended primarily for a business or commercial purpose is exempt from Regulation Z under 12 CFR 1026.3, and the CFPB’s commentary lists the factors used to judge business purpose. That is general context, not legal advice.

For related reading, Lendmire’s piece Do Payroll Deposits Count on a Practice Owner’s Bank Statement Loan? covers a similar owner-income question.

Pre-Application Checklist

• Twelve months of statements for the account type you plan to use.
• Written explanations for any large or unusual deposits.
• Operating agreement, stock ledger, or K-1 showing your percentage.
• A CPA letter or profit-and-loss statement if you want to support a lower expense factor.
• A plan for separating personal and business money, since mixed accounts invite questions.

Next Steps

Lendmire is a broker arranging financing through select lenders in its wholesale network, and no outcome is a commitment to lend. Tax treatment can depend on how the funds are used and how the property is held; investors should keep clear records and speak with a qualified tax professional before relying on any deduction.

About Lendmire

A non-QM mortgage broker (NMLS# 2371349), Lendmire arranges bank statement and other alternative-documentation financing for self-employed borrowers and real estate investors in 41 markets — 40 states plus Washington, D.C. Because loans are underwritten on documented deposits and other alternative income documentation rather than tax returns, the structure suits self-employed buyers and entity-owned businesses. Lendmire places loans through wholesale investor lenders; it is not a direct lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.

References

1. Scotsman Guide: Rev Up the Engine for Non-QM Lending

2. eCFR: 12 CFR 1026.3

3. CFPB: Regulation Z Commentary on 1026.3